Crane Company

07/31/2026 | Press release | Distributed by Public on 07/31/2026 12:56

Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
This Quarterly Report on Form 10-Q contains information about Crane Company some of which includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements other than historical information or statements about our current condition. You can identify forward-looking statements by the use of terms such as "believes," "contemplates," "expects," "may," "could," "should," "would," or "anticipates," other similar phrases, or the negatives of these terms.
Reference herein to "Crane," "the Company," "we," "us" and "our" refer to Crane Company and its subsidiaries unless the context specifically states or implies otherwise. References to changes in "core sales" or "core sales growth" in this report include the change in sales excluding the impact of foreign currency translation and acquisitions and divestitures from closing up to the first anniversary, of such acquisitions or divestitures. Amounts in the following discussion are presented in millions, except employee, share and per share data, or unless otherwise stated. Due to rounding, numbers presented throughout this report may not add up precisely to totals we provide, and percentages may not precisely reflect the absolute figures.
We have based the forward-looking statements relating to our operations on our current expectations, estimates and projections about us and the markets we serve. We caution you that these statements are not guarantees of future performance and involve risks and uncertainties. These statements should be considered in conjunction with the discussion in Part I, the information set forth under Item 1A, "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2025. We have based many of these forward-looking statements on assumptions about future events that may prove to be inaccurate. Accordingly, our actual outcomes and results may differ materially from what we have expressed or forecast in the forward-looking statements. Any differences could result from a variety of factors, including the following:
•The effect of changes in economic conditions in the markets in which we operate, including the impact of U.S. tariff policy and retaliatory tariffs on our business, financial market conditions, end markets for our products, fluctuations in raw material prices, inflationary pressures, supply chain disruptions and access to key raw materials, higher interest rates and the financial condition of our customers and suppliers;
•Economic, social and political instability, geopolitical uncertainties including the ongoing conflict in the Middle East, currency fluctuation and other risks of doing business outside of the United States;
•Our ability to successfully identify, value and integrate acquisitions and to realize synergies and opportunities for growth and innovation;
•The impact of commercial air traffic levels which are affected by a different array of factors including geopolitical instability, general economic conditions and global corporate travel spending, or terrorism;
•Competitive pressures, including the need for technology improvement, successful new product development and introduction, impact from pricing strategies and/or any inability to pass increased costs of raw materials, including tariffs, to customers;
•A reduction in congressional appropriations that affect defense spending;
•The ability of the U.S. government to terminate our government contracts;
•Information systems and technology networks failures and breaches in data security, personally identifiable and other information, non-compliance with our contractual or other legal obligations regarding such information;
•The impact of governmental regulations and failure to comply with those regulations;
•Our ongoing need to attract and retain highly qualified personnel and key management;
•Adverse effects of changes in tax, environmental and other laws and regulations in the United States and other countries in which we operate;
•The outcomes of legal proceedings, claims and contract disputes;
•Investment performance of our pension plan assets and fluctuations in interest rates, which may affect the amount and timing of future pension plan contributions; and
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
•Adverse effects as a result of further increases in environmental remediation activities, costs and related claims.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Recent Transactions and Events
Acquisition of Druck, Panametrics and Reuter-Stokes
On January 1, 2026, the Company completed the acquisition of Druck, Panametrics and Reuter-Stokes. Collectively, they are leading providers of sensor-based technologies for aerospace, nuclear and process industries. The Druck brand is integrated into the Aerospace & Advanced Technologies segment. Panametrics and Reuter-Stokes brands are integrated into the Process Flow Technologies segment.
Other Acquisition
On January 1, 2026, the Company completed the acquisition of a leading provider of inline process control optical measurement solutions for biopharma, pharmaceutical and other demanding markets. The acquired company has been integrated into our Process Flow Technologies segment.
Tariff Refunds
On February 20, 2026, the U.S. Supreme Court ruled that tariffs imposed under the International Emergency Economic Powers Act ("IEEPA") were not authorized by the statute. The Company is the importer of record for certain raw materials and products that were previously subject to such tariffs under IEEPA. On March 4, 2026, the U.S. Court of International Trade issued an additional ruling that importers that paid tariffs under the IEEPA are due refunds and ordered U.S. Customs and Border Protection ("CBP") to begin the refund process for all importers who were subject to IEEPA duties. On April 20, 2026, CBP launched Phase 1 of its process for submitting IEEPA refund claims.
As the nature, timing, and amount of any such refunds remain uncertain, the Company elected to account for such refunds under the gain contingency model. During the three and six months ended June 30, 2026, the Company recognized $18.7 million of tariff refunds as a reduction to "Cost of sales" in the Condensed Consolidated Statements of Operations. No portion of the recognized refunds was allocated to inventory, as the underlying inventory to which the refunds related had been sold prior to June 30, 2026. In addition, the Company recognized $0.8 million of interest income related to tariff refunds received through June 30, 2026.
Outlook
Our sales depend heavily on industries that are cyclical in nature or are subject to market conditions, which may cause customer demand for our products to be volatile and unpredictable. Demand in these industries is affected by fluctuations in domestic and international economic conditions, geopolitical instability including the ongoing conflict in the Middle East, as well as currency fluctuations, commodity costs, tariff impacts, and a variety of other factors.
For 2026, we expect total sales growth in the mid 20%s, driven by the Druck, Panametrics, Reuter-Stokes, and Optek acquisitions, as well as core sales growth at the mid-to-higher end of our long-term 5-6% core growth expectation and a slight foreign exchange benefit. We expect an improvement in operating profit driven primarily by productivity benefits and operating leverage on higher volumes, lower transaction related expenses, higher pricing net of inflation and contributions from the Druck, Panametrics, Reuter-Stokes, and Optek acquisitions.
Aerospace & Advanced Technologies
In 2026, we expect Aerospace & Advanced Technologies sales to increase in the mid 20%s range driven by core sales growth modestly above our 7-9% long-term core sales expectation, a mid-teen percentage contribution from the Druck acquisition and a slight benefit from favorable foreign exchange. We expect an improvement in our commercial OEM business driven by higher aircraft build rates, and increased demand for our military OEM and aftermarket business driven by continued global geopolitical uncertainty. We expect segment operating profit to increase compared to 2025 due to higher volumes, positive net price and the contribution from the Druck acquisition. However, we expect operating margin to decline modestly compared to 2025 driven by the dilutive impact of the Druck acquisition.
Process Flow Technologies
In 2026, we expect Process Flow Technologies sales to increase in the mid 20%s driven by flat-to-low single digit core sales growth, a low-20% contribution from the Panametrics, Reuter-Stokes, and Optek acquisitions, as well as a 1% benefit from foreign exchange. We expect core sales to be driven by demand in the pharmaceutical, water and waste-water and cryogenic markets offset by continued market softness in the chemical markets. We expect segment operating profit to increase compared to 2025 due primarily to the contribution from the Panametrics, Reuter-Stokes, and Optek acquisitions. However, we expect operating margin to be relatively flat compared to 2025 driven primarily by productivity and net price offset by the dilutive impact of the Panametrics, Reuter-Stokes, and Optek acquisitions.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results from Continuing Operations - Three Months Ended June 30, 2026 and 2025
The following information should be read in conjunction with our condensed consolidated financial statements and related notes. All comparisons below refer to the second quarter 2026 versus the second quarter 2025, unless otherwise specified.
Second Quarter Favorable/(Unfavorable) Change
(dollars in millions) 2026 2025 $
%(a)
Net sales $ 724.7 $ 577.2 $ 147.5 25.6 %
Cost of sales 417.2 334.9 (82.3) (24.6) %
as a percentage of sales 57.6 % 58.0 %
Engineering, selling and administrative 163.2 139.4 (23.8) (17.1) %
as a percentage of sales 22.5 % 24.2 %
Operating profit 144.3 102.9 41.4 40.2 %
Operating margin 19.9 % 17.8 %
Other income (expense):
Interest income 2.1 2.9 (0.8) (27.6) %
Interest expense (16.6) (4.3) (12.3) (286.0) %
Miscellaneous (expense) income, net (1.8) 3.1 (4.9) (158.1) %
Total other (expense) income, net (16.3) 1.7 (18.0) NM
Income from continuing operations before income taxes 128.0 104.6 23.4 22.4 %
Provision for income taxes 32.1 24.3 (7.8) (32.1) %
Net income from continuing operations attributable to common shareholders $ 95.9 $ 80.3 $ 15.6 19.4 %
(a) A variance designated as "NM" indicates such calculation is not meaningful.
Sales increased by $147.5 million, or 25.6%, to $724.7 million in 2026. The period-over-period change in sales included:
•an increase in sales related to the Druck, Panametrics, Reuter-Stokes and Optek acquisitions of $114.5 million, or 19.8%;
•an increase in core sales of $30.0 million, or 5.2%, which was driven by higher pricing; and
•favorable foreign currency translation of $3.0 million, or 0.6%.
Cost of sales increased by $82.3 million, or 24.6%, to $417.2 million in 2026. The increase primarily reflects the impact of the Druck, Panametrics, Reuter-Stokes and Optek acquisitions of $80.6 million, or 24.1%, higher material, labor and other manufacturing costs of $22.7 million, or 6.8%, unfavorable mix of $15.5 million, or 4.6%, and unfavorable foreign currency translation of $1.7 million, or 0.5%, partially offset by the favorable impact of tariff refunds of $18.7 million, or 5.6%, strong productivity gains of $13.6 million, or 4.1%, lower volumes of $3.8 million, or 1.1%, and cost savings of $2.2 million, or 0.7%.
Engineering, selling and administrative expenses increased by $23.8 million, or 17.1%, to $163.2 million in 2026, primarily driven by the acquisitions of Druck, Panametrics, Reuter-Stokes and Optek of $32.5 million, or 23.3%, partially offset by productivity and cost savings of $9.2 million, or 6.6%.
Operating profit increased by $41.4 million, or 40.2%, to $144.3 million in 2026. The increase primarily reflected higher productivity gains and cost savings of $21.4 million, or 20.8%, strong net price of $16.4 million, or 15.9%, impact from tariff refunds of $18.7 million, or 18.2%, and favorable contributions from acquisitions of $1.3 million, or 1.3%, partially offset by unfavorable mix of $15.5 million, or 15.1% and lower volumes of $1.3 million, or 1.3%.
Our effective tax rate for the three months ended June 30, 2026 is higher than the prior year's comparable period, primarily due to an increase in non-U.S. taxes and lower benefit related to share-based compensation.
Our effective tax rate for the three months ended June 30, 2026 is higher than the statutory U.S. federal tax rate of 21%, primarily due to earnings in jurisdictions with statutory tax rates higher than the United States, expenses that are statutorily non-deductible for income tax purposes and the impact of U.S. state taxes, partially offset by excess share-based compensation benefits, tax credit utilization, and the statutory U.S. deduction related to our non-U.S. subsidiaries' income.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Comprehensive Income
Three Months Ended
June 30,
(in millions) 2026 2025
Net income $ 95.9 $ 86.4
Components of other comprehensive income (loss), net of tax
Currency translation adjustment (9.5) 41.7
Changes in pension and postretirement plan assets and benefit obligation, net of tax 2.4 2.7
Other comprehensive (loss) income, net of tax (7.1) 44.4
Comprehensive income before allocation to noncontrolling interests 88.8 130.8
Less: Noncontrolling interests in comprehensive income - -
Comprehensive income attributable to common shareholders $ 88.8 $ 130.8
For the three months ended June 30, 2026, comprehensive income was $88.8 million compared to $130.8 million in the same period of 2025. The $42.0 million decrease was primarily driven by $51.2 million year-over-year unfavorable impact of foreign currency translation, primarily related to the euro and British pound, offset by higher net income of $9.5 million.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Segment Results of Operations - Three Months Ended June 30, 2026 and 2025
Aerospace & Advanced Technologies
Second Quarter Favorable/(Unfavorable) Change
(dollars in millions) 2026 2025 $
%(a)
Net sales by product line:
Commercial Original Equipment $ 128.4 $ 96.6 $ 31.8 32.9 %
Military Original Equipment 84.1 72.7 11.4 15.7 %
Commercial Aftermarket Products 62.6 57.2 5.4 9.4 %
Military Aftermarket Products 34.0 31.7 2.3 7.3 %
Other $ 30.0 $ - $ 30.0 NM
Total net sales $ 339.1 $ 258.2 $ 80.9 31.3 %
Cost of sales $ 206.5 $ 152.3 $ (54.2) (35.6) %
as a percentage of sales 60.9 % 59.0 %
Engineering, selling and administrative $ 43.7 $ 38.0 $ (5.7) (15.0) %
as a percentage of sales 12.9 % 14.7 %
Operating profit $ 88.9 $ 67.9 $ 21.0 30.9 %
Operating margin 26.2 % 26.3 %
Supplemental Data:
Backlog (b)
$ 1,267.7 $ 1,052.8 $ 214.9 20.4 %
(a) A variance designated as "NM" indicates such calculation is not meaningful.
(b) Includes $100.2 million of backlog as of June 30, 2026 pertaining to the Druck acquisition.
Sales increased $80.9 million, or 31.3%, to $339.1 million in 2026, primarily driven from the impact of the Druck acquisition of $45.9 million, or 17.8%, higher core sales of $34.4 million, or 13.3%, and favorable foreign currency translation of $0.6 million, or 0.2%.
•Sales of Commercial Original Equipment increased $31.8 million, or 32.9%, to $128.4 million in 2026, reflecting the impact of the Druck acquisition and strong demand from aircraft manufacturers.
•Sales of Military Original Equipment increased $11.4 million, or 15.7%, to $84.1 million in 2026, reflecting strong demand from defense and space customers and the impact of the Druck acquisition.
•Sales of Commercial Aftermarket Products increased $5.4 million, or 9.4%, to $62.6 million in 2026, reflecting continued demand from the airlines due to strong air traffic.
•Sales of Military Aftermarket Products increased $2.3 million, or 7.3%, to $34.0 million in 2026, reflecting stronger demand for military products, partly in response to heightened geopolitical tensions globally.
•Other sales increased $30.0 million, reflecting the impact of the Druck acquisition.
Cost of sales increased by $54.2 million, or 35.6%, to $206.5 million in 2026, primarily reflecting the impact of the Druck acquisition of $31.6 million, or 20.7%, unfavorable mix of $15.2 million or 10.0%, increased material, labor and other manufacturing costs of $13.9 million, or 9.1%, higher volumes of $5.7 million, or 3.7%, partially offset by the favorable impact of tariff refunds of $5.5 million, or 3.6%, strong productivity gains of $5.9 million, or 3.9%, and cost savings of $1.0 million, or 0.7%.
Engineering, selling and administrative expenses increased by $5.7 million, or 15.0%, to $43.7 million in 2026, primarily driven by the acquisition of Druck of $11.6 million, or 30.5%, partially offset by cost savings and productivity of $6.1 million, or 16.1%.
Operating profit increased by $21.0 million, or 30.9%, to $88.9 million in 2026, primarily reflecting higher volumes and strong net price of $18.9 million, or 27.8%, higher productivity gains and cost savings of $8.9 million, or 13.1%, favorable impact from tariff refunds of $5.5 million, or 8.1%, favorable contribution from the acquisition of Druck of $2.7 million, or 4.0%, offset by unfavorable mix of $15.2 million, or 22.4%.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Process Flow Technologies
Second Quarter Favorable/(Unfavorable) Change
(dollars in millions) 2026 2025 $ %
Net sales by product line:
Process Valves and Related Products $ 307.6 $ 241.2 $ 66.4 27.5 %
Commercial Valves 35.1 37.1 (2.0) (5.4) %
Pumps and Systems 42.9 40.7 2.2 5.4 %
Total net sales $ 385.6 $ 319.0 $ 66.6 20.9 %
Cost of sales $ 210.7 $ 182.6 $ (28.1) (15.4) %
as a percentage of sales 54.6 % 57.2 %
Engineering, selling and administrative $ 93.3 $ 72.5 $ (20.8) (28.7) %
as a percentage of sales 24.2 % 22.7 %
Operating profit $ 81.6 $ 63.9 $ 17.7 27.7 %
Operating margin 21.2 % 20.0 %
Supplemental Data:
Backlog (a)
$ 619.6 $ 403.1 $ 216.5 53.7 %
(a) Includes $230.9 million of backlog as of June 30, 2026 pertaining to the Panametrics, Reuter-Stokes, and Optek acquisitions.
Sales increased by $66.6 million, or 20.9%, to $385.6 million in 2026, primarily driven by the impact of Panametrics, Reuter-Stokes and Optek acquisitions of $68.6 million, or 21.5%, favorable foreign currency translation of $2.4 million, or 0.8%, offset by lower core sales of $4.4 million, or 1.4%.
•Sales of Process Valves and Related Products increased by $66.4 million, or 27.5%, to $307.6 million in 2026, primarily driven by the impact of the Panametrics, Reuter-Stokes and Optek acquisitions of $68.6 million, or 28.4%, favorable foreign currency translation of $2.1 million, or 0.9%, offset by lower core sales of $4.3 million, or 1.8%. driven by lower volumes.
•Sales of Commercial Valves decreased by $2.0 million, or 5.4%, to $35.1 million in 2026, reflecting lower core sales of 2.3 million, or 6.2%, driven by lower volumes, offset by the impact of favorable foreign currency translation of $0.3 million, or 0.8%.
•Sales of Pumps and Systems increased by $2.2 million, or 5.4%, to $42.9 million in 2026, reflecting an increase in core sales driven by higher pricing.
Cost of sales increased by $28.1 million, or 15.4%, to $210.7 million, primarily driven by the impact of the Panametrics, Reuter-Stokes and Optek acquisitions of $49.0 million, or 26.8%, higher material, labor and other manufacturing costs of $8.8 million, or 4.8%, and unfavorable foreign currency translation of $1.4 million, or 0.8%, partially offset by the impact of tariff refunds of $13.2 million, or 7.2%, lower volumes of $9.5, million or 5.2%, strong productivity gains of $7.7 million, or 4.2%, and to a lesser extent cost savings of $1.1 million, or 0.6%.
Engineering, selling and administrative expenses increased by $20.8 million, or 28.7%, to $93.3 million, primarily driven by the acquisitions of Panametrics, Reuter-Stokes and Optek.
Operating profit increased by $17.7 million, or 27.7%, to $81.6 million in 2026. The increase is primarily due to strong productivity gains, net price and cost savings of $15.6 million, or 24.4%, and the favorable impact from tariff refunds of $13.2 million, or 20.7%, partially offset by lower volumes and the net impact of acquisitions driven primarily by amortization of acquisition-related intangibles and transaction related expenses, of $11.1 million, or 17.4%.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results from Continuing Operations - Six Months Ended June 30, 2026 and 2025
The following information should be read in conjunction with our condensed consolidated financial statements and related notes. All comparisons below refer to the first six months of 2026 versus the first six months of 2025, unless otherwise specified.
Year-to-Date Favorable/(Unfavorable) Change
(dollars in millions) 2026 2025 $
%(a)
Net sales $ 1,421.1 $ 1,134.8 $ 286.3 25.2 %
Cost of sales 832.3 654.9 (177.4) (27.1) %
as a percentage of sales 58.6 % 57.7 %
Engineering, selling and administrative 344.4 275.9 (68.5) (24.8) %
as a percentage of sales 24.2 % 24.3 %
Operating profit 244.4 204.0 40.4 19.8 %
Operating margin 17.2 % 18.0 %
Other income (expense):
Interest income 3.7 6.1 (2.4) (39.3) %
Interest expense (33.4) (8.8) (24.6) (279.5) %
Miscellaneous (expense) income, net (1.6) 2.1 (3.7) (176.2) %
Total other expense, net (31.3) (0.6) (30.7) NM
Income from continuing operations before income taxes 213.1 203.4 9.7 4.8 %
Provision for income taxes 50.1 44.8 (5.3) (11.8) %
Net income from continuing operations attributable to common shareholders $ 163.0 $ 158.6 $ 4.4 2.8 %
(a) A variance designated as "NM" indicates such calculation is not meaningful.
Sales increased by $286.3 million, or 25.2%, to $1,421.1 million in 2026. The year-over-year change in sales included:
•an increase in sales related to the Druck, Panametrics, Reuter-Stokes and Optek acquisitions of $216.6 million, or 19.1%;
•an increase in core sales of $51.4 million, or 4.5%, which was driven by higher pricing; and
•favorable foreign currency translation of $18.3 million, or 1.6%.
Cost of sales increased by $177.4 million, or 27.1%, to $832.3 million in 2026. The increase primarily reflects the impact of the Druck, Panametrics, Reuter-Stokes and Optek acquisitions of $154.0 million, or 23.5%, higher material, labor and other manufacturing costs of $45.7 million, or 7.0%, unfavorable mix of $25.9 million, or 4.0%, and unfavorable foreign currency translation of $10.7 million, or 1.6%, partially offset by strong productivity gains of $27.6 million, or 4.2%, favorable impact of tariff refunds of $18.7 million, or 2.9%, lower volumes of $8.3 million, or 1.3%, and cost savings of $4.6 million, or 0.7%.
Engineering, selling and administrative expenses increased by $68.5 million, or 24.8%, to $344.4 million in 2026, primarily driven by the acquisitions of Druck, Panametrics, Reuter-Stokes and Optek of $66.9 million, or 24.2%.
Operating profit increased by $40.4 million, or 19.8%, to $244.4 million in 2026. The increase primarily reflected higher productivity gains and cost savings of $42.3 million, or 20.7%, favorable impact from tariff refunds of $18.7 million, or 9.2%, strong net price of $12.9 million, or 6.3%, and favorable currency translation of $2.0 million, or 1.0%, partially offset by unfavorable mix of $25.9 million, or 12.7%, lower volumes of $5.3 million, or 2.6%, and the net impact of acquisitions of $4.3 million, or 2.1%, driven primarily by amortization of acquisition-related intangibles.
Our effective tax rate for the six months ended June 30, 2026 is higher than the prior year's comparable period, primarily due to an increase in non-U.S. taxes and lower benefit related to share-based compensation.
Our effective tax rate for the six months ended June 30, 2026 is higher than the statutory U.S. federal tax rate of 21%, primarily due to earnings in jurisdictions with statutory tax rates higher than the United States, expenses that are statutorily non-deductible for income tax purposes and the impact of U.S. state taxes, partially offset by excess share-based compensation benefits, tax credit utilization, and the statutory U.S. deduction related to our non-U.S. subsidiaries' income.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Comprehensive Income
Six Months Ended
June 30,
(in millions) 2026 2025
Net income $ 163.0 $ 193.5
Components of other comprehensive income, net of tax
Currency translation adjustment (28.1) 60.0
Changes in pension and postretirement plan assets and benefit obligation, net of tax 4.8 5.4
Other comprehensive (loss) income, net of tax (23.3) 65.4
Comprehensive income attributable to common shareholders $ 139.7 $ 258.9
For the six months ended June 30, 2026, comprehensive income was $139.7 million compared to $258.9 million in the same period of 2025. The $119.2 million decrease was primarily driven by a $88.1 million unfavorable impact of foreign currency translation, primarily related to the euro and British pound, and by lower net income of $30.5 million.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Segment Results of Operations - Six Months Ended June 30, 2026 and 2025
Aerospace & Advanced Technologies
Year-to-Date Favorable/(Unfavorable) Change
(dollars in millions) 2026 2025 $ %
Net sales by product line:
Commercial Original Equipment $ 255.0 $ 190.6 $ 64.4 33.8 %
Military Original Equipment 168.7 144.5 24.2 16.7 %
Commercial Aftermarket Products 115.6 117.6 (2.0) (1.7) %
Military Aftermarket Products 63.1 54.4 8.7 16.0 %
Other 55.0 - $ 55.0 NM
Total net sales $ 657.4 $ 507.1 $ 150.3 29.6 %
Cost of sales $ 402.7 $ 300.1 $ (102.6) (34.2) %
as a percentage of sales 61.3 % 59.2 %
Engineering, selling and administrative $ 94.3 $ 74.5 $ (19.8) (26.6) %
as a percentage of sales 14.3 % 14.7 %
Operating profit $ 160.4 $ 132.5 $ 27.9 21.1 %
Operating margin 24.4 % 26.1 %
A variance designated as "NM" indicates such calculation is not meaningful.
Sales increased $150.3 million, or 29.6%, to $657.4 million in 2026, primarily driven from the impact of the Druck acquisition of $88.8 million, or 17.5%, higher core sales of $57.7 million, or 11.4%, and favorable foreign currency translation of $3.8 million, or 0.7%.
•Sales of Commercial Original Equipment increased $64.4 million, or 33.8%, to $255.0 million in 2026, reflecting the impact of the Druck acquisition and strong demand from aircraft manufacturers.
•Sales of Military Original Equipment increased $24.2 million, or 16.7%, to $168.7 million in 2026, primarily reflecting strong demand from defense and space customers and the impact of the Druck acquisition.
•Sales of Commercial Aftermarket Products decreased $2.0 million, or 1.7%, to $115.6 million in 2026.
•Sales of Military Aftermarket Products increased $8.7 million, or 16.0%, to $63.1 million in 2026, reflecting stronger demand for military products, partly in response to heightened geopolitical tensions globally.
•Other sales increased $55.0 million, reflecting the impact of the Druck acquisition.
Cost of sales increased by $102.6 million, or 34.2%, to $402.7 million in 2026, primarily reflecting the impact of the Druck acquisition of $60.4 million, or 20.1%, unfavorable mix of $26.2 million, or 8.7%, increased material, labor and other manufacturing costs of $25.2 million, or 8.4%, and higher volumes of $8.3 million, or 2.8%, partially offset by strong productivity gains of $11.8 million, or 3.9%, favorable impact of tariff refunds of $5.5 million, or 1.8%, and cost savings of $2.1 million, or 0.7%.
Engineering, selling and administrative expenses increased by $19.8 million, or 26.6%, to $94.3 million in 2026, primarily driven by the acquisition of Druck of $24.8 million, or 33.3%, partially offset by cost savings and productivity of $6.1 million, or 8.2%.
Operating profit increased by $27.9 million, or 21.1%, to $160.4 million in 2026, primarily reflecting higher volumes and strong net price of $26.5 million, or 20.0%, higher productivity gains and cost savings of $17.7 million, or 13.4%, favorable impact from tariff refunds of $5.5 million, or 4.2%, and the favorable contribution from the acquisition of Druck of $3.6 million, or 2.7%, partially offset by unfavorable mix of $26.2 million, or 19.8%.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Process Flow Technologies
Year-to-Date Favorable/(Unfavorable) Change
(dollars in millions) 2026 2025 $ %
Net sales by product line:
Process Valves and Related Products $ 602.8 $ 474.7 $ 128.1 27.0 %
Commercial Valves 76.1 74.5 1.6 2.1 %
Pumps and Systems 84.8 78.5 6.3 8.0 %
Total net sales $ 763.7 $ 627.7 $ 136.0 21.7 %
Cost of sales $ 429.6 $ 354.8 $ (74.8) (21.1) %
as a percentage of sales 56.3 % 56.5 %
Engineering, selling and administrative $ 188.3 $ 146.2 $ (42.1) (28.8) %
as a percentage of sales 24.7 % 23.3 %
Operating profit $ 145.8 $ 126.7 $ 19.1 15.1 %
Operating margin 19.1 % 20.2 %
Sales increased by $136.0 million, or 21.7%, to $763.7 million in 2026, primarily driven by the impact of Panametrics, Reuter-Stokes and Optek acquisitions of $127.8 million, or 20.4%, favorable foreign currency translation of $14.5 million, or 2.3%, offset by lower core sales of $6.3 million, or 1.0%.
•Sales of Process Valves and Related Products increased by $128.1 million, or 27.0%, to $602.8 million in 2026, primarily driven by the impact of the Panametrics, Reuter-Stokes and Optek acquisitions of $127.8 million, or 26.9%, favorable foreign currency translation of $11.2 million, or 2.4%, offset by lower core sales of $10.9 million, or 2.3%, driven by lower volumes.
•Sales of Commercial Valves increased by $1.6 million, or 2.1%, to $76.1 million in 2026, primarily due to favorable foreign currency translation of $3.1 million or 4.2%. as the British pound strengthened against the U.S. dollar offset by lower core sales of 1.5 million or 2.0% driven by lower volumes.
•Sales of Pumps and Systems increased by $6.3 million, or 8.0%, to $84.8 million in 2026, reflecting an increase in core sales driven by higher pricing.
Cost of sales increased by $74.8 million, or 21.1%, to $429.6 million, primarily driven by the impact of the Panametrics, Reuter-Stokes and Optek acquisitions of $93.7 million, or 26.4%, higher material, labor and other manufacturing costs of $20.5 million, or 5.8%, unfavorable foreign currency translation of $8.7 million, or 2.5%, partially offset by impact of tariff refunds of $13.2 million, or 3.7%, lower volumes of $16.6 million, or 4.7%, strong productivity gains of $15.8 million, or 4.4%, and to a lesser extent cost savings of $2.5 million, or 0.7%.
Engineering, selling and administrative expenses increased by $42.1 million, or 28.8%, to $188.3 million, primarily driven by the acquisitions of Panametrics, Reuter-Stokes and Optek.
Operating profit increased by $19.1 million, or 15.1%, to $145.8 million in 2026. The increase is primarily due to strong productivity gains, net price and cost savings of $30.5 million, or 24.1%, impact from tariff refunds of $13.2 million, or 10.4%, favorable foreign currency translation of $1.4 million, or 1.1%, partially offset by lower volumes and the net impact of acquisitions driven primarily by amortization of acquisition-related intangibles and transaction related expenses of $26.2 million, or 20.7%.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
Six Months Ended
June 30,
(in millions) 2026 2025
Net cash provided by (used for):
Operating activities from continuing operations $ 92.8 $ 58.8
Investing activities from continuing operations (1,380.6) (30.3)
Financing activities (87.7) (235.3)
Discontinued operations (a)
- 213.6
Effect of exchange rates on cash and cash equivalents (3.9) 18.7
(Decrease) increase in cash and cash equivalents $ (1,379.4) $ 25.5
(a) For the six months ended June 30, 2025, the cash provided by discontinued operations is from the sale of the Engineered Materials business. See Note 3, "Discontinued Operations" to the Condensed Consolidated Financial Statements for additional information.
Our operating philosophy is to deploy cash provided from operating activities, when appropriate, to provide value to stockholders by reinvesting in existing businesses, by making acquisitions that will strengthen and complement our portfolio, by divesting businesses that are no longer strategic or aligned with our portfolio and where such divestitures can generate capacity for strategic investments and initiatives that further optimize our portfolio, and by paying dividends and/or repurchasing shares. At any given time, and from time to time, we may be evaluating one or more of these opportunities, although we cannot assure you if or when we will consummate any such transactions.
Our current cash balance, together with cash we expect to generate from future operations and borrowing capacity available under our revolving credit facility, is expected to be sufficient to finance our short-term and long-term capital requirements.
In September 2025, we entered into a $900 million senior unsecured delayed draw term loan facility (the "Term Facility"), which matures on September 30, 2030, and a $900 million senior unsecured revolving facility (the "Revolving Facility"), which also matures on September 30, 2030. In December 2025, the Company borrowed $900 million under the Term Facility and an additional $250 million under the Revolving Facility. The borrowings under the Term Facility and Revolving Facility were used, along with cash on-hand, to fund the Company's January 2026 acquisitions of Druck, Panametrics Reuter-Stokes, and Optek.
On February 11, 2026, the Company borrowed $50 million under the Revolving Facility to fund working capital requirements and general corporate purposes. During the second quarter of 2026, the Company repaid $100 million under the Revolving Facility.
Operating Activities
Cash provided by operating activities from continuing operations was $92.8 million in the first six months of 2026, as compared to $58.8 million during the same period last year. The increase in cash provided by operating activities from continuing operations was primarily driven by the $24.0 million increase in net income from continuing operations adjusted for the exclusion of non-cash items and a $5.2 million decrease in defined benefit plans and postretirement contributions.
Investing Activities
Cash flows relating to investing activities from continuing operations consist primarily of cash used for acquisitions of businesses and capital expenditures. Cash used for investing activities from continuing operations was $1,380.6 million in the first six months of 2026, as compared to $30.3 million in the comparable period of 2025. The increase in cash used for investing activities was primarily attributable to the aggregate cash paid of $1,355.4 million for the acquisitions of Druck, Panametrics, Reuter-Stokes and Optek, offset by a $5.0 million decrease in capital expenditures. Capital expenditures are made primarily for increasing capacity, replacing equipment, supporting new product development, and improving information systems.
Financing Activities
Financing cash flows consist primarily of dividend payments to stockholders, repayments of indebtedness, proceeds from our Credit Facilities and proceeds from the issuance of common stock in connection with employee stock plans.
Cash used for financing activities was $87.7 million during the first six months of 2026 compared to $235.3 million in the comparable period of 2025. The decrease in cash used for financing activities was primarily attributable to a $100.0 million decrease in repayments of long-term debt and $50.0 million of borrowings under the Company's Revolving Facility in the first quarter of 2026.
Crane Company published this content on July 31, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on July 31, 2026 at 18:56 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]